Ethics Opinions

Opinion No. 78-11

Summary: An attorney may permit a client to charge a retainer with a credit card. If the payment is an advance for future services, then the funds must be segregated until the services are actually provided. See DR 9-102, Supreme Judicial Court Rule 3:22.

Facts: An attorney has asked whether a client may charge a retainer with a credit card. He refers us to our Opinion No. 74-1 which said that a charge card could only be used in "payment of services previously rendered, as to which the lawyer and the client have agreed upon the amount of the fee."
Discussion: In Opinion 74-1, we indicated that a credit card arrangement for the payment of legal services was permissible provided that the assignments to the bank were without recourse to the attorney and provided further that the charges may be made only with respect to "services previously rendered." Our purpose in requiring that credit cards be used only in connection with previously rendered services was to minimize the possibility of a tripartite dispute among the lawyer, the client and the bank.
As a result of Bates v. State Bar of Arizona, 433 U.S. 350 (1977), which prohibited blanket restrictions on lawyer advertising, we already have modified a part of our Opinion No. 74-1. Specifically, in Opinion No. 77-15, we stated that an attorney who offers a credit card plan may use credit card signs and insignias.
In the Bates decision, general prohibitions on advertising by lawyers were found to unduly restrict First Amendment rights. In view of this decision, we believe that a general prohibition against the use of credit cards to charge retainers is not proper. However, DR 9-102 of Supreme Judicial Court Rule 3:22 indicates that the lawyer who accepts a charge retainer must employ certain procedures for the client's protection, as well as his own. Specifically, the lawyer must keep the retainer separate from his other funds, keep careful records regarding the retainer, and must account for the funds when the matter is concluded.
In our opinion, the procedures described above are necessary in view of the peculiar nature of most retainers. A retainer is usually a payment on account of future services. It may or may not be sufficient to cover all of the services necessary in the particular matter. It may also exceed the amount necessary in the matter, in which case the lawyer is obligated to account for the return of the unused portion to the client. In any event, in a cash transaction, the lawyer is required to keep the retainer separate from his own funds until he has earned it, see DR 9-102, supra. We believe that the same procedures should be followed in a non-cash transaction.


Permission to publish granted by the Board of Delegates on September 20, 1978. As stated in the Rules of the Committee on Professional Ethics, this advice is that of a committee without official governmental status.
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